Montgomery coffers filling with collected debts

County Attorney Leon Rodriguez said the success by the county’s debt collection unit at collecting money owed by delinquent taxpayers and bad check writers had been “beyond our most optimistic expectations.”

From July to February, the debt collection unit pulled in $20.1 million — with $4.8 million collected in January alone.

Instances of the county collecting more money than expected are rare these days. Montgomery recently closed a more than $600 million budget deficit and is projected to face a $370 million gap next year.

In April, the county’s budget deficit grew by $70 million because of lower-than-expected revenues from county income taxes, largely due to a shrinking stock market.

The latest county budget analysis, released May 11, reported that the county’s transfer tax collections fell 21 percent from a year ago because of the moribund housing market.

That analysis had other bad news for the county: The Department of Corrections was $750,000 over its estimated budget because of an increase in the average daily inmate population; the sheriff’s office lost grant money, and even the Department of Liquor Control had lower-than-expected profits.

But the county’s debt collection unit is likely to be up 25 percent this year. Rodriguez said the county was being more strategic and was focusing its energy on debts it was more likely to collect.

The bulk of the money collected by the county attorney’s office comes from payments on personal property taxes that are more than 45 days overdue, said James Savage, chief of the public interest litigation division.

Savage said it often took little more than a letter from the county attorney’s office explaining that legal action may be necessary to settle a debt.

“That encourages people to simply pay,” he said.

Savage said the nature of debt collection was cyclical and he doubted the debt collection unit would bring in as much money next year as it has the last two years, even if the economy improved.